Nike Chief Executive Officer Mark Parker will hand over the reins of the sportswear giant early next year but stay on as executive chairman, the company said on Tuesday.
Parker, who has been CEO since 2006, will be succeeded by former eBay CEO and Nike board member John Donahoe on January 13, 2020. It is the second such announcement by a major athletic gear company in one day: Tuesday morning Under Armour founder and CEO Kevin Plank said he was stepping down and would be succeeded next year by his top lieutenant, operations chief Patrik Frisk.
During Parker’s long tenure, Nike’s sales have surged and its stock soared. On Tuesday, the stock, Dow 30 component, hit an all-time intraday high of $96.87, making the company worth almost $150 billion.
Sales in 2006, when Parker became CEO, were $15.9 billion. By last fiscal year, which ended on May 31, sales were up to $39.1 billion. What’s more, success in China, which had eluded Nike for a few years earlier this decade, was on the rise. In the last fiscal year, China generated $6.2 billion in sales for Nike, fueled by 21% growth in each of the two preceding years.
Nike has also done very well selling at its own stores and on its website. Last year the company’s direct-to-consumer business took in almost $12 billion. In 2015, Fortunenamed Parker “Business Person of the Year.”
Yet for all the success, Nike has also been dealing with a number of public relations crises during Parker’s tenure. Most recently, Alberto Salazar, the head coach for the elite long-distance running program, Nike Oregon Project, was hit with a 4-year doping ban.
Earlier in 2019, several Nike-sponsored athletes said the company enforced financial penalties if they missed performance goals due to pregnancy, leading to policy changes after public outcry.
And last year, 11 senior managers left Nike amid allegations of harassment and discrimination against female employees. The most prominent executive to leave was Trevor Edwards, the president of the Nike brand who had been seen as a potential CEO. Parker apologized to staff in May 2018 for tolerating a corporate culture that didn’t take such complaints seriously.
Still, under Parker’s watch, Nike has grabbed headlines for its product innovation. Earlier this month, top marathoner Eliud Kipchoge ran a marathon distance, 26.2 miles in just under two hours wearing Nike Zoom Vaporfly Next% shoes. The brand has also established itself as a force in fashion: Nordstrom’s new Manhattan flagship, for instance, has a massive section for Nike’s highest-end shoes.
Parker, who had been a track athlete at Penn State, joined the company in 1979, first working at Nike’s research and development lab in New Hampshire. He became instrumental in its new sneaker design, helping him rise in Nike’s ranks. In 2006, Nike’s iconic co-founder, Phil Knight, named Parker as the next CEO.
Donahoe, who had been eBay CEO from 2008 to 2015, has been a Nike director since 2014. He is currently the CEO of cloud computing company ServiceNow. His tech expertise should be useful for Nike, which in recent years has emerged as a major innovator of tech in its products and its stores. At the same time, Donahoe has little retail experience and his time at eBay had mixed results, with PayPal, where he is still a director, being spun out four years ago under pressure from activist investor Carl Icahn.
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